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Thursday, 27 May 1999
Page: 5588

Senator FAULKNER —My question is directed to Senator Hill, representing the Prime Minister. Is the minister aware of comments yesterday by the President of ACOSS, Mr Michael Raper, in relation to the funding of a GST deal with the Democrats? He said:

. . . any further erosion of the budget surplus raises the unacceptable risk for low income people of more harsh social expenditure cuts in the future.

Minister, does the government share Mr Raper's concern, and will the minister now give the guarantee he refused to give yesterday that the government will not further erode the budget surplus in order to pay for a food-free GST deal with the Democrats?

Senator HILL (Environment and Heritage) —I did hear some comments from the ACOSS spokesman this morning and, in part, I agree with what he was saying. He went on to draw out a process that might follow, with which I did not agree, but the concept of reducing the surplus having a detrimental consequence upon the less well off is something that I agree with. That is why we have sought to put the surplus in place, against the continuing opposition of the Labor Party—in order that the total community can benefit, and particularly those who are less well off.

Obviously, if you bring mortgage rates down to their lowest level in 30 years, you have corresponding reductions in rent and less well-off people are better off than if you have interest rates at record highs, as they used to be under Labor governments. Why were they at record highs? Because Labor did not worry about huge borrowings. That is why Labor left $80 billion of debt from only its last five years in government. We have a different economic approach. If Senator Faulkner has suddenly crossed the road and decided that prudent economic management is sensible, then we heartily agree. We applaud this sudden change of attitude of the Labor Party.

Senator Faulkner —Are you going to give the guarantee?

Senator HILL —Madam President, what I am saying to Senator Faulkner is that we will not waste a surplus that has been hard won for the benefit of all Australians, particularly those not so well off.

Senator FAULKNER —Madam President, I ask a supplementary question. I note again the minister is unwilling to give the guarantee. Minister, among the comments that you indicate you heard this morning, are you aware of these, and I quote Mr Raper again:

The only equitable way to pay for the food exemption is to cut the proposed tax cuts or close down the number of unfair income tax avoidance loopholes . . .

Does the minister agree that one such avoidance loophole is the tax abuse of family trusts? Will the Leader of the Government in the Senate reaffirm the commitment given by the Prime Minister in the ANTS package that the government will tax trusts as companies?

Senator HILL (Environment and Heritage) —Tax abuses through trusts are not condoned by this government. In fact, we have taken action to counter it—contrary, again, to the record of 13 years of Labor. We at least are on the track of reducing loopholes and answering abuses. We are taking positive action in that direction. The less well off in Australia are those that are designed to specifically benefit from the ANTS package, because unless we can ensure continuing economic growth we will not increase the size of the cake from which they can get their fair share.

Senator Faulkner —Madam President, I raise a point of order. I asked a direct question to Senator Hill—whether Senator Hill would reaffirm the commitment given by the Prime Minister in the ANTS package that the government will tax trusts as companies. That is the supplementary question. Could you ask the minister to actually try to answer it?

The PRESIDENT —I do not ask him to try to answer it. I draw his attention to the nature of the question, and it is for him to determine how he answers it.

Senator HILL —I have answered the question—that we will protect the surplus. We will not buy deals with the surplus. We are not interested in that. What we are interested in is a sound economic package which will enable the cake to grow, so that the less well off can be sure of a growing share.

Senator Faulkner —Madam President, I raise a point of order. Could you direct the minister to answer the question I asked, not any other question—the question of whether the government will tax trusts as companies. That is the supplementary question. That is the question we are entitled to receive an answer to.

The PRESIDENT —I am sure the minister is aware of the supplementary question. I cannot direct him how to answer it. He answers it as he sees is relevant.

Senator HILL —If I have any time left, I also want to point out to the Senate that the income tax cuts are critically important as well. (Time expired)